The Bay Area, infamous for high home prices and stiff competition for housing, is unique in California’s housing landscape. Of course, it’s relatively expensive and difficult to be a homebuyer almost anywhere in California, but these complications are multiplied
exponentially in the Bay Area, leading to what many have deemed a housing
But have high home prices and competition finally reached their tipping point? Signs across the Bay Area point to: yes.
The Bay Area’s housing market is cooling in more ways than one, according to a recent Trulia
The average days on market has increased across the Bay
Area in 2018. This increase has been most significant in the:
As homes have sat longer on the market, the share of listings receiving a price
cut has also increased in cities across the Bay Area, including in the:
After nearly seven years of consistently rising home prices and competition for limited inventory, Bay Area homebuyers are finally beginning to see some relief. But for sellers and real estate professionals, a slower market can be problematic.
As homes have begun to sit longer and more price cuts have occurred, home
prices are starting to decline. In fact, mid-tier prices in San Francisco have experienced a decline each month since June 2018.
This may be news to our readers, as most media reports choose to focus on annual gains — after all, prices can be volatile on a month-to-month basis, and mid-tier home prices are still 9% above a year earlier in San Francisco due to gains experienced earlier
in the year. But first tuesday is confident that the decline
in home prices in the latter half of 2018 is only the start of a longer trend.
This forecast is based on three criteria:
What are real estate professionals to do with this information?
Armed with knowledge of a coming slowdown, real estate professionals can prepare today by:
Sacramento’s housing market is in a modest deceleration, particularly in sales volume, according to realtor.com.
Trends emerging in the last few months in residential real estate are likely to continue in 2019, according to a forecast from realtor.com.
The online arm of the National Association of Realtors released its official prediction for sales prices and volume Wednesday. Here is more from that and a chat with realtor.com’s director of economic research, Javier
1. Sacramento should see 2.3 percent growth in average sales price in 2019, while the actual number of sales will drop by 1 percent. Nationally the figure is 2.2 percent for price appreciation, while sales will drop by 2 percent.
2. Vivas said Sacramento’s housing market is in a modest deceleration, particularly in sales volume. A lack of affordability both locally and in the Bay Area has pushed many would-be buyers to gear back, with the Bay Area market causing fewer people to sell
homes and head east for cheaper options.
3. In addition to affordability, Vivas said, Sacramento isn’t poised to see as much job growth in the future, taking away a reason for people to migrate here. And while millennials are expected to be the main driver in housing in most markets even through
the next recession, he said, a slightly older demographic of 35- to 44-year olds is likely to be a bigger sales force locally, he said.
4. A slowdown in growth doesn't mean housing is headed into negative territory, Vivas said. “It’s still very much a seller’s market in many places,” he said. But buyer confidence in the economy overall is actually higher than it is in housing, he added.
5. If buyer sentiment is having a strong effect anywhere, it’s in entry-level homes, where inventory is scarce. Vivas said those buyers have seen prices, and more recently interest rates, rising to levels they can’t afford, leading them to delay buying at